|
|
|
|
|
|
|
|
|
|
|
|
|
|
Previous: NUGGET EXPLORATION INC, 8-K, 1998-08-06 |
Next: SUSQUEHANNA BANCSHARES INC, S-4/A, 1998-08-06 |
FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended June 30, 1998
Commission File Number 1-8635
AMERICAN MEDICAL ALERT CORP.
(Exact Name of Small Business Issuer as Specified in its Charter)
New York 11-2571221
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
3265 Lawson Boulevard, Oceanside, New York 11572
(Address of principal executive offices)
(Zip Code)
(516) 536-5850
(Issuer's telephone number, including area code)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 5,989,208 shares of $.01 par
value common stock as of August 3, 1998.
<PAGE>
AMERICAN MEDICAL ALERT CORP.
INDEX
PART I FINANCIAL INFORMATION
PAGE
Item 1. Financial Statements.
Condensed Balance Sheets for June 30, 1998 2
and December 31, 1997
Condensed Statements of Income for the 3
Six Months Ended June 30, 1998 and 1997
Condensed Statements of Income for the 4
Three Months Ended June 30, 1998 and 1997
Condensed Statements of Cash Flows for 5
the Six Months Ended June 30, 1998 and 1997
Notes to Condensed Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations. 7
PART II OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security-Holders. 8
Item 6. Exhibits and Reports on Form 8-K. 9
<PAGE>
Item 1. Financial Statements.
AMERICAN MEDICAL ALERT CORP.
CONDENSED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
June 30,1998 December 31,
(Audited) 1997*
<S> <C> <C>
CURRENT ASSETS:
Cash
Accounts and notes receivable $ 476,460 $ 304,739
(net of allowance for doubtful accounts of $50,000 in '98 & $30,000 in '97) 1,701,634 1,574,738
Inventory 1,209,787 1,310,551
Prepaid expenses and other current assets 234,132 196,990
Deferred income tax benefit 93,000 97,000
------------ ------------
Total Current Assets 3,715,013 3.484,018
----------- -----------
FIXED ASSETS:
(Net of accumulated depreciation and amortization) 4,150,311 3,732,849
OTHER ASSETS 228,455 34,761
----------- ------------
TOTAL ASSETS $8,093,779 $7,251,628
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Note Payable Bank $ -0- $ 150,000
Accounts payable 260,795 161,795
Accrued expenses 133,211 139,802
Taxes payable 8,271 -0-
Current portion of deferred income 4,700 -0-
Current portion of long-term debt 116,985 9,056
------------- -------------
Total Current Liabilities 523,962 460,653
------------- -----------
DEFERRED INCOME TAX LIABILITY 318,000 318,000
DEFERRED INCOME 20,866 -0-
LONG-TERM DEBT-LESS CURRENT MATURITIES 145,171 2,797
------------ -----------
Total Liabilities 1,007,999 781,450
----------- ----------
COMMITMENTS AND CONTINGENT LIABILITIES
SHAREHOLDERS' EQUITY
Common stock - $.01 par value; authorized - 10,000,000 shares; 59,668 59,045
issued - 5,966,783 shares in 1998 and 5,904,607 shares in 1997. 4,648,908 4,523,189
Additional paid-in capital 2,483,236 1,993,976
----------- -----------
Retained Earnings 7,191,812 6,576,210
Less 43,910 shares in 1998 & 1997 of treasury stock, at cost (106,032) (106,032)
----------- -----------
Total Shareholders' Equity 7,085,780 6,470,178
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY
See accompanying notes to condensed financial statements. $8,093,779 $7,251,628
========== ==========
</TABLE>
* Derived from audited financial statements
-2-
<PAGE>
AMERICAN MEDICAL ALERT CORP.
CONDENSED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30
------------------------
1998 1997
---- ----
<S> <C> <C>
Revenues:
Services $ 3,730,217 $ 3,284,793
Product Sales 314,803 291,893
------------- -------------
4,045,020 3,576,686
------------ ------------
Cost and Expenses (Income):
Costs related to services 1,367,279 1,233,608
Costs of products sold 250,747 270,419
Selling, general and
administrative expenses 1,542,238 1,355,578
Interest expense 10,096 23,934
Other income (3,600) (680)
-------------- --------------
3,166,760 2,882,859
------------ -----------
Income before provision for income taxes 878,260 693,827
Provision for income taxes 389,000 305,700
------------- ------------
NET INCOME $ 489,260 $ 388,127
------------ ===========
Net Income per share:
Basic
Diluted $ .08 $ .07
--------------- --------------
$ .08 $ .07
--------------- --------------
Weighted average number of common shares outstanding (Note 3)
Basic
Diluted 5,886,905 5,819,549
============ ===========
</TABLE>
See accompanying notes to condensed financial statements
-3-
<PAGE>
AMERICAN MEDICAL ALERT CORP.
CONDENSED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three months Ended June 30,
------------------------------
<
1998 1997
---- ----
<S> <C> <C>
Revenues:
Services $ 1,907,792 $ 1,669,028
Product Sales 93,545 177,318
------------ -----------
2,001,337 1,846,346
Cost and Expenses (Income):
Cost related to service 705,175 642,316
Costs of products sold 89,550 163,020
Selling, general and
administrative expenses 791,025 650,759
Interest expense 3,548 11,104
Other Income (2,974) (334)
------------ -------------
1,586,324 1,466,865
---------- ----------
Income before provisions for income taxes 415,013 379,481
Provision for income taxes 181,000 166,700
----------- -----------
NET INCOME $ 234,013 $ 212,781
============= ==============
Net income per share
Basic $ .04 $ .04
============= ==============
Diluted $ .04 $ .04
============= ==============
Weighted average number of common shares outstanding (Note 3)
Basic 5,902,094 5,834,425
========== ==========
Diluted 5,990,777 5,936,156
========== ==========
</TABLE>
See accompanying notes to condensed financial statements
-4-
<PAGE>
AMERICAN MEDICAL ALERT CORP.
CONDENSED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30
-------------------------
1998 1997
---- ----
Cash Flows From Operating Activities:
<S> <C> <C>
Net Income $ 489,260 $ 388,127
Adjustments to reconcile net income to
Net cash provided by operating activities
Provision for bad debts 20,000 -0-
Depreciation and amortization 477,709 357,580
Loss on unrecovered leased medical equipment 42,390 -0-
Change in Assets and Liabilities:
(Increase) in receivables (146,896) (204,468)
Decrease in inventory 100,764 90,743
(Increase) in prepaid expenses, deferred taxes,
and other assets (59,336) (156,375
(Increase) in accounts payable, accrued
expenses, taxes payable and deferred income (126,246) (163,438
---------- ---------
Net Cash Provided by Operating Activities 797,645 312,169
Cash Flows from Investing Activities:
Net expenditures for fixed assets (806,288) (469,347)
Payment for account acquisitions 175,000 -0-
Net Cash (Used In) Investing Activities 981,288 469,347
------------- -------------
Cash Flows from Financing Activities:
Repayment of bank borrowing (150,000) -0-
Increase (Decrease) in loans payable 250,303 (4,455)
Net Proceeds upon exercise of stock options 126,342 91,940
Sale/leaseback of equipment 128,719 -0-
------------- -------------
Net Cash Provided by Financing Activities 355,364 87,485
------------- ------------
Net (Decrease) increase in Cash $ 171,721 $ (69,693)
Cash, Beginning of Period 304,739 301,013
------------- -------------
Cash, End of Period $ 476,460 $ 231,320
============= =============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
CASH PAID DURING THE PERIOD
FOR INTEREST $ 10,096 $ 25,256
========= =========
CASH PAID DURING THE PERIOD
FOR INCOME TAXES $344,730 $207,129
========== ==========
</TABLE>
<PAGE>
AMERICAN MEDICAL ALERT CORP.
Notes to Condensed Financial Statements
(Unaudited)
1. General:
These financial statements should be read in conjunction with the
financial statements and notes thereto for the year ended December 31,
1997 included in the Company's Annual Report on Form 10-KSB.
2. Results of Operations:
In the opinion of management, the accompanying unaudited condensed
financial statements contain all adjustments (consisting only of normal
recurring accruals) necessary to present fairly the financial position
as of June 30, 1998, and the results of operations and of cash flows
for the six months ended June 30, 1998 and 1997.
The accounting policies used in preparing these financial statements
are the same as those described in the December 31, 1997 financial
statements.
The results of operations for the six months ended June 30, 1998 are
not necessarily indicative of the results to be expected for any other
interim period or for the full year.
3. Income Per Share:
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings
per Share" which changes the methodology of calculating earnings per
share. SFAS No. 128 requires the disclosure of diluted earnings per
share regardless of its difference from basic earnings per share. The
Company adopted SFAS No. 128 in December 1997. Earnings per share data
for the six months ended June 30, 1998 and 1997 have been stated to
conform with this pronouncement.
-6-
<PAGE>
AMERICAN MEDICAL ALERT CORP.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(for the Six Months Ended June 30, 1998)
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The following discussion and analysis provides information which management
believes is relevant to an assessment and understanding of the Company's results
of operations and financial condition. The discussion should be read in
conjunction with the consolidated financial statements contained in the latest
Annual Report dated December 31, 1997.
This discussion contains forward-looking statements which, in addition to
assuming a continuation of the degree and timing of customer utilization and
rate of renewals of contracts with the Company at historical levels, are subject
to a number of known and unknown risks that, in addition to general economic,
competitive and other business conditions, could cause actual results,
performance and achievements to differ materially from those described or
implied in the forward-looking statements.
Liquidity and Capital Resources
On April 27, 1998, the Company renegotiated a $ 2,000,000 Revolving Credit
Facility with a bank (based upon 75% of eligible accounts receivable and 25% of
inventory, as defined) expiring May 31, 2000. The note bears interest at the
lower of prime rate or LIBOR Rate plus 2.50% (as defined) and is collateralized
by the Company's assets. There are no amounts outstanding under the Credit
Facility as of July 31, 1998. The agreement provides for negative and
affirmative covenants including those related to tangible net worth, working
capital and other borrowings.
During 1998, the Company anticipates that it will make capital investments of
approximately $1,500,000 of which approximately $655,000 has been expended
through June 30, 1998 for the purchase and production of additional systems the
Company intends to rent. In addition, approximately $145,000 has been expended
for the purchase of office and computer equipment used in operations. The
Company has also entered into a sale/leaseback agreement for equipment.
The Company believes that its present cash and working capital position, its
borrowing availability and future anticipated income will be sufficient to meet
its cash and working capital needs for the foreseeable future.
Results of Operations
Revenue from services increased $ 445,424 for the six months ended June 30, 1998
as compared to the same period in 1997, an increase of 14%. This increase
resulted from the expansion of the Company's customer base for monthly
monitoring and rental services. Costs related to services for the six months
ended June 30, 1998 and 1997 were 37% and 38% respectively.
Revenue from services increased $ 238,764 for the three months ended June 30,
1998 as compared to the same period in 1997, an increase of 14%. This increase
resulted from the expansion of the
-7-
<PAGE>
Company's customer base for monthly monitoring and rental services. Costs
related to services for the three months ended June 30, 1998 and 1997 were 37%
and 38% respectively.
Revenue from product sales increased $ 22,910 for the six months ended June 30,
1998 as compared to the same period in 1997, an increase of 8%. The gross profit
on product sales for the six months ended June 30, 1998 and 1997 was 20% and 7%
respectively.
Revenue from product sales decreased $ 83,773 for the three months ended June
30, 1998 as compared to the same period in 1997, a decrease of 47%. The gross
profit on product sales for the three months ended June 30, 1998 and 1997 was 4%
and 8% respectively. The decrease in product sales was a result of management's
changing focus toward the growth of its subscriber base and rental income.
Interest expense for the six months ended June 30, 1998 and 1997 was $10,096 and
$25,236 respectively. Selling, general and administrative expenses as compared
as a percentage of total revenues for the six months ended June 30, 1998 and
1997 were 38% and 38% respectively.
Interest expense for the three months ended June 30, 1998 and 1997 was $3,548
and $11,104 respectively. Selling, general and administrative expenses as
compared as a percentage of total revenues for the three months ended June 30,
1998 and 1997 were 40% and 35% respectively.
PART II. - OTHER INFORMATION
Item 4. Submission of matters to a Vote of Security Holders.
On June 6, 1998, the Company held its 1998 Annual Meeting of Shareholders (the
"1998 Meeting").
At the 1998 Meeting, the Company's shareholders elected five directors to serve
until the 1999 Annual Meeting of Shareholders and until their respective
successors shall be elected and qualified. The vote for such directors was as
follows:
For Withheld
Howard M. Siegel 4,710,468 41,275
Peter Breitstone 4,714,893 16,850
Leonard Herz 4,712,793 18,950
Theodore Simon 4,710,893 20,850
Dennis Stern 4,716,093 15,650
The Company's shareholders voted with respect to the ratification and approval
of Margolin, Winer & Evens, LLP as the Company's independent auditors for the
year ending December 31, 1998. Approximately 99% of the votes cast with respect
to the ratification and approval voted in favor of the proposal and accordingly,
the proposal was approved.
-8-
<PAGE>
Item 6. Exhibit and Reports on Form 8-K:
(a) Exhibits:
27. Financial Data Schedule
(b) Reports on Form 8-K:
No reports on Form 8-K were filed.
-9-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
AMERICAN MEDICAL ALERT CORP.
Dated: August 6, 1998 By: /s/ Howard M. Siegel
--------------------
Howard M. Siegel
President and Chief Operating
Officer
By: /s/ Corey M. Aronin
-------------------
Corey M. Aronin
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- ---------- -----------
27. Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<NAME> AMERICAN MEDICAL ALERT CORP
<CIK> 0000700721
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 476,460
<SECURITIES> 0
<RECEIVABLES> 1,751,634
<ALLOWANCES> 50,000
<INVENTORY> 1,209,787
<CURRENT-ASSETS> 3,715,013
<PP&E> 4,150,311
<DEPRECIATION> 0
<TOTAL-ASSETS> 8,093,779
<CURRENT-LIABILITIES> 523,962
<BONDS> 262,156
0
0
<COMMON> 59,668
<OTHER-SE> 7,026,112
<TOTAL-LIABILITY-AND-EQUITY> 8,093,779
<SALES> 314,803
<TOTAL-REVENUES> 4,045,020
<CGS> 250,747
<TOTAL-COSTS> 3,166,760
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10,096
<INCOME-PRETAX> 878,260
<INCOME-TAX> 389,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 489,260
<EPS-PRIMARY> .08
<EPS-DILUTED> .08
</TABLE>
|
|